Shop And Establishment

Shop And Establishment

The Shop and Establishment Act is applicable nationwide, and all the commercial establishments, such as the hotels, and eateries, amusement parks, theatres, and other entertainment houses, as well as any other such public amusement places, come under the purview of the Act.

Get to know what is commercial establishment meaning. The definition of a ‘Commercial Establishment’, as given in the Act is:

1. Any commercial sector, such as banking, trading or insurance establishments
2. Any establishment where individuals are employed or engaged to do office work or provide service
3. The hotels, eateries and boarding houses or a smaller café or refreshment house
4. Amusement and entertainment places such as theatres and cinema halls or amusement parks

All such above mentioned commercial establishments come under the Act and need to adhere to the norms and regulations set by the Act for the treatment of their employees.

The exceptions to the Act vary in the States and each State has given a list of shops and establishments act that come into the Act, and who require the registrations under the Act to run their business in the State.

If you are starting a commercial establishment or a shop, (as mentioned above), you need to file for registration under the Act, within 30 days of commencement of your establishment.

This registration is mandatory for several reasons, including the opening of the current account in a bank. This Shop and Establishment Act license, forms as a basic license and a proof of your business to apply for other registrations required to run a business in India.

While each state has set different rules and regulations for registration under the Act, the basic procedure remains the same. The Act requires every business to get approval from the Department of Labour. The registration certificate can be obtained from the Chief Inspector of Shops and Establishment Act, or from other inspectors delegated to the area where you run the establishment.

An application, in the prescribed format, (obtained from the official websites of different States) needs to be submitted to the inspector in charge, with:

1. The name of the establishment
2. Name and details of the owner (employer) and the employees (at the time of incorporation of business)
3. The address of the establishment and a copy of sale deed or rental agreement for the shop
4. PAN card of the business or the owner

All the above details are to be submitted in the form, along with the prescribed fees to the inspector.

Once the application is received, the inspector will check the details, make a visit to the establishment, if required, and shall provide a registration certificate under the Act. The registration certificate needs to be displayed in a prominent place in the shop and renewed in case of any changes in the details provided (such as the number of employees and so on) or upon expiry. The shop and Establishment Act registration is one of the mandatory requirements of all businesses which operate from an establishment or shop. Any changes made in the details or the closure of such establishment needs to be initiated to the inspector within 15 days of the said change or closure